Only a couple of trading days are remaining in the month of October. Whereas the month of September was strongly bearish for the EURUSD, GBPUSD, AUDUSD and NZDUSD, the October month is not showing any resemblance to the previous month. The USD strength, so far, was not able to push further. For a review of the EURUSD and USDCAD click here and for the AUDUSD here.
NZDUSD CONTEST: BEARS WIN
Nathan talked about the Kiwi in his article more than a month ago: the NZDUSD Decision Point (Comment Contest). Those Forex traders that chose the bearish side won the contest – congrats to the bears! And for the bulls: better luck next time– it was only a contest anyhow. 🙂
Back to the Kiwi: this pair was an excellent example of the USD strength. The currency pair posted 3 bearish candles in a row but had the largest one in September. The October trading month, however, has so far been incapable of breaking the September low and the odds of that changing are slim.
NZDUSD BEAR-BULL LINES
An impressive 1,100 pip fall stopped at a heartbeat when it reached the weekly bottom (green circle). Price then bounced up 300+ pips but was unable to break above the broken support trend lines because it turned into resistance.
The most eye catching question at the moment is:
- Will the NZDUSD use the resistance as a bouncing spot for a continuation of the down trend;
- OR will the NZDUSD bearish break turn out to be ‘false’ and can price fight itself back above the support trend lines?
Personally I am expecting a bigger bullish retracement in November to occur before bearish momentum continues. However, to remove bias from trading, I will use the resistance spots (trend lines and top) and the support level as the decision spots or the ‘lines in the sand’.
- As long as price stays in between the S&R, it could easily continue with a drawn out consolidation but the playing field changes when a break occurs;
- The NZDUSD is bullish upon an upside break and bearish upon a downside break;
- Upon a breakout Forex traders are always vulnerable to pullbacks and false breakouts so it could best to have patience before trading the break. But price certainly has entered a bearish or bullish zone.
Personally I would not be surprised to see price action unfold as mentioned in the screenshot below but I am using confirmation levels and events before any actual trading is implemented.
YOUR DECISION TIME
How do you see the month of November? Will the November candle close bullish or bearish or as a doji? (A candle will be counted as a Doji if the candle close is within 10% of the candle open in comparison to the entire candle measured from high to low.) I personally will choose the Doji for November and a bearish candle for December.
Those that lost the previous contest have a chance to take ‘revenge’; whereas the winners of the contest have an opportunity to confirm their winning streak. Join us and write in the comments whether you expect a bearish, bullish or Doji month of November!
Thank you for sharing this article on the web and wish you Happy Hunting!
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